New Accounting Standard Updates

9 Months Ended

Jul. 01, 2011

New Accounting Standard Updates

New Accounting Standard Updates

(13) NEW ACCOUNTING STANDARD UPDATES:

In June 2009, the FASB issued an accounting standard update which amends certain requirements for enterprises involved with variable interest entities to improve financial reporting and to provide more relevant and reliable information to users of financial statements. The Company adopted this standard in the first quarter of fiscal 2011, the effect of which was not material.

In June 2009, the FASB issued an accounting standard update regarding transfers of financial assets which eliminates the concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets and requires enhanced disclosures to provide financial statement users with greater transparency about transfers of financial assets, including securitization transactions, and an entity's continuing involvement in and exposure to the risks related to transferred financial assets. The Company adopted this accounting standard update in the first quarter of fiscal 2011, which impacts the Company's accounting for its Receivables Facility (see Note 10).

In January 2010, the FASB issued an accounting standard update that will require new disclosures about recurring and non-recurring fair value measurements. The new disclosures include significant transfers into and out of level 1 and 2 measurements and will change the current disclosure requirement of level 3 measurement activity from a net basis to a gross basis. The standard also clarifies existing disclosure guidance about the level of disaggregation, inputs and valuation techniques. The new and revised disclosures were effective for ARAMARK in fiscal 2010, except for the revised disclosures about level 3 measurement activity, which are not effective for ARAMARK until beginning in fiscal 2012 (see Note 15). The new standard impacts disclosures only and has no impact on the Company's results of operations or financial position. The Company is currently evaluating the disclosure impact on level 3 measurement activity.

In July 2010, the FASB issued an accounting standard update that will require new disclosures about the credit quality of financing receivables and the allowance for credit losses. The enhanced disclosures are intended to improve financial statement users' understanding of the nature of credit risk associated in a company's financing receivables, how that risk is analyzed in determining the related allowance for credit losses and changes to the allowance during the reporting period. The Company adopted this standard for disclosures about the credit quality of financing receivables in the first quarter of fiscal 2011, the effect of which was not material. The Company adopted the disclosures about the activity in the allowance for credit losses in the second quarter of fiscal 2011, the effect of which was not material.

In December 2010, the FASB issued authoritative guidance on disclosure of supplementary pro forma information for business combinations. The new guidance requires that pro forma financial information should be prepared as if the business combination occurred as of the beginning of the prior annual period. The guidance is effective for the Company for business combinations with acquisition dates occurring in fiscal 2012. Early adoption is permitted. The Company early adopted this authoritative guidance in the second quarter of fiscal 2011 (see Note 2).

In May 2011, the FASB issued an accounting standard update that is intended to achieve common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards. The new standard does not extend the use of fair value but rather provides clarification of existing guidance and additional disclosures. The guidance is effective prospectively for the Company beginning in the second quarter of fiscal 2012. The Company is currently evaluating the impact of this pronouncement.

In June 2011, the FASB issued an accounting standard update that modifies the presentation of comprehensive income in the financial statements. The standard requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This standard eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. The guidance is effective retrospectively for the Company beginning for interim periods in fiscal 2013. The Company is currently evaluating the disclosure impact of this pronouncement.